Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Tobacco in Saudi Arabia

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Executive Summary

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Sales of tobacco declines due to excise taxes

In 2017, sales of tobacco in Saudi Arabia declined due to excise tax implementation at 100% that was implemented as a first in the region. As of June 2017, the Saudi Ministry of Health doubled the price of cigarettes.

Exodus of expatriate workers negatively affects cigarettes

In light of the Saudi Labour Ministry’s implementation of monthly fees on each dependent of expatriate workers living in the Kingdom in mid-2017, many expatriates either sent their families home or chose to leave Saudi Arabia altogether. This negatively affected some brands of cigarettes in 2016 and 2017, which left the market.

Fierce competition continues amongst the key players in cigarettes

In 2017, the competition amongst the key players in cigarettes remained fierce, as manufacturers strived to retain and increase their market shares after the implementation of the new excise tax. Philip Morris International maintained its leading position, followed by British American Tobacco and Imperial Brands in retail volume terms.

Convenience stores and tobacco specialists lead distribution

Convenience stores was the leading distribution channel for cigarettes in 2017, due to supermarkets and hypermarkets removing cigarette counters from their stores in 2012. Tobacco specialists maintained its position as the leading distribution channel for cigars, cigarillos and smoking tobacco, in addition to some cigarette brands.

Other tougher anti-smoking laws are expected over the forecast period

Over the forecast period it is expected that the Saudi government will implement tougher laws as part of its Tobacco Control Plan. For example, at the end of 2017, the Saudi Traffic Police implemented a new law aimed at protecting citizens in public places by prohibiting smoking for drivers of and passengers in cars.

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